Derivative Actions

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This 7th annual edition of Summer Shorts presents brief commentary on three must-read decisions in business divorce cases involving the use of special litigation committees in derivative actions by LLC members; dissolution of a family-owned real estate holding corporation and LLC; and a Delaware case in which Chancery Court ordered dissolution of a deadlocked LLC co-owned by celebrity chef Gordon Ramsay. …
Continue Reading Summer Shorts: Three Must-Read Decisions

This week’s New York Business Divorce features a recent decision in which the court addressed novel issues — and found guidance in Delaware case law — in a shareholder derivative action challenging compensation packages given to officer/directors.
Continue Reading Navigating Rocky Shoals and Safe Harbors When Board Members Fix Their Own Compensation

Sometimes the tax collector can prove the bigger impediment to minority shareholder claims than the majority shareholders, as explained in this week’s New York Business Divorce featuring a recent case involving a Delaware corporation whose charter was voided for nonpayment of taxes.
Continue Reading Minority Shareholders’ Derivative Suit Foiled by Voiding of Corporation’s Charter for Nonpayment of Taxes

Justice Elizabeth Emerson’s recent decision in Sardis v Sardis, denying a fee application under Section 626 (e) of the Business Corporation Law, is essential reading for counsel involved in shareholder derivative actions. Get the story in this week’s New York Business Divorce.
Continue Reading Finding No “Therapeutic” Benefit to Corporation, Court Denies Fee Award in Discontinued Shareholder Derivative Action

This week’s New York Business Divorce revisits a family feud involving a Brooklyn-based food distributor and affiliated realty company, in which an ousted minority owner was on the short end of a series of recent decisions by Justice Sylvia Ash.
Continue Reading “Food Fight” Sequel Ends Badly for Ousted Sibling

The Manhattan Commercial Division recently dismissed derivative claims by a partner in a family-owned realty partnership based on conflicts of interest and his “litigious nature”. Learn more about this unusual and instructive case in this week’s New York Business Divorce. …
Continue Reading Suing on Behalf of People You’re Suing Can Sink a Derivative Lawsuit — Especially If You Have a Litigious Nature

The lesson of the case highlighted in this week’s New York Business Divorce is simple: Don’t file for dissolution under the shareholder oppression and looting statute unless you’re prepared for the opposing shareholders to elect to purchase your shares for fair value, because you may not be able to walk it back.
Continue Reading Once Opened, The Door to Judicial Dissolution and Buy-Out Is Hard to Close

New York’s statutes authorizing a judicial dissolution petition by oppressed minority shareholders, and granting respondents a corresponding right to elect to purchase the petitioner’s shares, include a provision for a “surcharge” upon controlling shareholders for wrongful dissipation or transfer of corporate assets. It’s a rarely litigated provision, as evidenced by a court decision last month which may be the first ever reported case in which a surcharge claim was upheld. Learn more in this week’s New York Business Divorce. …
Continue Reading The Elusive Surcharge in Dissolution Proceedings